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Cadillac Tax Estimate Calculator

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Starting in 2022 the Affordable Care Act begins accessing a tax on health plans that have premiums and HSA/HRA/FSA account contribution that exceed certain limits. It is called the 'High Cost Employer-Sponsored Health Coverage Excise Tax'. This calculator is designed to help determine if an employer has a health insurance plan that would be subject to this new tax.

Cadillac Tax Estimate Calculator Definitions

High Cost Employer-Sponsored Health Coverage Excise Tax
High Cost Employer-Sponsored Health Coverage Excise Tax is was passed as part of the Affordable Care Act. The tax is 40% on amounts paid for employer sponsored health insurance plans that are in excess of certain thresholds. This includes employer and employee contributions for premiums and most HSA/HRA/FSA contributions (after tax employer contributions to a HSA or FSA are not included). This is sometimes referred to as the "Cadillac Tax". On January 22nd, 2018 Congress passed and the President signed an additional two-year delay of this excise tax which changes the effective date from 2020 to 2022 (there was an original postponement until 2020 passed in 2015). While the tax was originally non-tax-deductible, the December 2015 changes make it tax-deductible for employers who pay it.

The thresholds for the excise tax are as follows:

High Cost Employer-Sponsored Health Coverage Excise Tax Thresholds*
YearSingleMarried
before 2022no taxno tax
2022$10,200$27,500
2023-2024Previous year's threshold increases by Inflation rate plus 1%Previous year's threshold increases by Inflation rate plus 1%
2024 and beyondPrevious year's threshold increases by Inflation ratePrevious year's threshold increases by Inflation rate
Projected inflation rate
The projected inflation rate is used to increase the Health Coverage Excise tax in future years. For 2023 and 2024 the threshold for paying the excise tax is increased by the rate of inflation plus one percent. All following years use only the inflation rate. This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2024 the CPI has a long-term average of 3.0% annually. Over the last 40 years the highest CPI recorded was 13.5% in 1980. For the 12 months ending October 31st 2024 the CPI for All Urban Consumers (CPI-U) was 3.2% as reported by the U.S. Bureau of Labor Statistics.
Projected premium inflation rate
**HEALTH_INFLATION_DEFINITION**
Average employee only health plan value
Enter the average annual value of health insurance premiums for employee only (single) coverage plan. This includes both employee and employer payments.
Average employee plus one child health plan value
Enter the average annual value of health insurance premiums for employee and one child coverage plan. This includes both employee and employer payments.
Average employee plus spouse health plan value
Enter the average annual value of health insurance premiums for employee and spouse coverage plan. This includes both employee and employer payments.
Average family health plan value
Enter the average annual value of health insurance premiums family coverage plan. This includes both employee and employer payments.
Average employer contributions to HSA/HRA/FSA
Enter the average employer contribution to an HSA/HRA/FSA per year. This is added to the average plan total to determine the amount subject to the excise tax.
Average pre-tax employee contributions to HSA/FSA
Enter the average pre-tax employee contribution to an HSA/FSA. This is added to the average plan total to determine the amount subject to the excise tax.